I lost a lot of money while investing. Will it reduce my tax bill?

I have unfortunately accumulated capital losses numbering in the tens of thousands of dollars from some poor investments. How can I take advantage of these from a tax perspective, and are they at all transferable to another entity?

Capital losses can only be applied against capital gains. It is not uncommon for accumulated capital losses to go to waste as people transition into retirement and the tax-free phase of superannuation.

It may be worth seeing an accountant to work out how best to take advantage of your situation.Credit: Simon Letch

The value of your accumulated losses reduces in real terms over time, due to inflation. That being the case, if you have other investments with capital gains, it would be worth meeting your accountant to assess whether you should deliberately sell some of those assets to trigger the gain now, so you can offset your accumulated losses with this gain.

You could then reinvest the proceeds in whatever is appropriate for your current circumstances. Just be careful to avoid a “wash sale”, the situation where you sell and then soon after buy back what you just sold, or something very similar. The ATO will certainly take a dim view.

My husband and I own a property jointly with my mother. We’ve owned the property together for the past 13 years. My mother needs to go into care. Do we need to sell the property to pay the RAD [refundable accommodation deposit]? The house is worth $550,000 and she owns 56 per cent. My mother was widowed in 2011, has $10,000 in the bank and receives a full age pension.

Thanks for your question. Aged care advice is a specialist area within financial planning, so I consulted my go-to expert Susan Cooper, of Age Wise Financial Planning, on this one.

Financial planning for aged care can be complex.Credit: Getty Images

She advised that assuming no “protected person” remains living in the property (generally a partner or dependant child), your mum’s interest in the house will be assessed as an asset for aged care fee means-testing purposes.

She would enter aged care as what is called a market price resident. This means she would be asked to pay the full RAD for her room in some way.

Based on the information that you have provided, the house could be sold to fund any substantial lump sum RAD payment. Alternatively, she could elect to pay for her accommodation via extra daily payments called DAP (daily accommodation payments), now calculated as 8.38 per cent a year times the unpaid RAD amount.

The full age pension wouldn’t be enough to fund both DAP fees and the basic daily care fee in aged care. However, your mum may be eligible to claim financial hardship assistance by claiming the property to be an “unrealisable asset” if the other owner/s don’t want to sell it. This could result in the government paying some of her aged care fees for her.

As you can see, aged care is a complex area. It would be worth exploring your mother’s options in more detail with an experienced aged care financial planner.

I read your recent advice to a man whose wife is sick in relation to their shares. Am I correct in thinking that if they were purchased before 1985, they will not have any CGT [capital gains tax] to pay?

Capital gains tax began in Australia on September 20, 1985. Assets purchased before this date are exempt. Note, however, that when the shares pass to beneficiaries via an estate, CGT will commence being assessed based on the market value at date of death.

Paul Benson is a certified financial planner at Guidance Financial Services. He hosts the What’s Possible? and Financial Autonomy podcasts. Questions to: [e-mail]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.